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Why Canada must simplify the tax code

Aaron Wudrick is the federal director of the Canadian Taxpayers’ Federation.

Are you paying all the tax you’re legally required to pay—and if not, is that okay?

That’s the question at the heart of the controversy over offshore tax havens, whereby mostly wealthy individuals structure their financial affairs to minimize their tax burdens. It’s a different question than issues around tax evasion—a black-and-white issue where the laws prohibiting it should be properly enforced, meaning the authorities should pursue violators and prosecute them as appropriate. By contrast, tax avoidance—where people use legal means to reduce the amount of tax they have to pay—is a much trickier subject. It primarily raises a moral question: is it wrong for people to try to legally minimize their tax burdens?

Large data leaks known as the Panama Papers in 2016 and Paradise Papers in 2017 have shed light on just how widespread the phenomenon of this aggressive tax planning is. These